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Malakoff ISD warned of big budget gap due to lower state funding

The Malakoff News of Malakoff, Texas

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MALAKOFF — Malakoff ISD trustees were warned April 18 about a looming budget shortfall of more than $600,000 that could lead to higher taxes and a magnifying glass turned on personnel expenses, which make up about 80 percent of the school's budget.

That scenario was presented to trustees during the school board's monthly meeting by MISD Superintendent Randy Perry, and hinges on loss of state funding called ASATR (Additional State Aid for Tax Reduction), which came about following Texas Legislature promises to ease property taxes through an increase in the homestead exemption.

However, ASATR funding expires in September 2017. In May 2015, the Texas Legislature voted 78-52 against a one-year ASATR extension, and legislators next meet in the months preceding the additional funding's expiration. The school district fiscal year ends in the summer, so upcoming budget talks will focus on cushioning the blow, with "no sacred cows," Perry said, who also pointed out that most expenses are on personnel. Malakoff ISD had to cut $900,000 from its budget in 2011, Perry added.

Christy Rome, executive director of the Texas School Coalition, a school-district advocacy group in Austin, gave board members a presentation on the subject, and said state lawmakers are already clamoring to provide more property-tax relief in that 2017 legislative session. She urged board members to take a "hope for the best, prepare for the worst" attitude about the possible funding reductions.

School districts and the State of Texas are currently embroiled in a lawsuit over school funding, which includes the model of taking money from "property rich" schools and transferring those funds to districts with inferior tax bases.

Known as "recapture," Malakoff ISD will next year give back $1.5 million of its own tax collections to be redistributed by the state government, Perry said. In essence, Rome said, the State of Texas is taking away funding meant to lower properly taxes, but is forcing some district to in fact, raise taxes.

Local schools, which are capped by state law on how high their tax rate can go without an election, believe that limit is a form of setting a property tax, and therefore violates the state constitution, which outlaws a property tax to fund state government.

Malakoff ISD, which

Perry said had the lowest tax rate in the area, is five cents under the state limit for its maintenance and operations (M&O) tax rate, proposed rates above which require local blessing at the ballot box.

Malakoff ISD is not alone in the East Texas area among property-rich districts that face ASATR reductions. While Malakoff ISD got about $670,000 in ASATR funding for its 2015-16 budget, Groes-beck ISD received more than $4 million, Leon ISD got $3.7 million, and Fairfield ISD budgeted $1.2 million Mildred ISD got nearly a half-million dollars in FY 2015-16, while LaPoynor ISD got about $325,000 and CayugalSD, another $200,000.

Also during the MISD monthly meeting, board members accepted the resignation of trustee Billy Sparks, who has taken an out-of-state job. Trustees also approved hiring Reilly Landscaping to handle the area around the new sports field house at the high school, which tentatively has its ribbon-cutting ceremony set for Monday, May 23 at 6 p.m.

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Original Publication Date: April 22, 2016

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